Help with a Response

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Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Help with a Response

Hi Everyone.

I've been talking to this guy at work (Mark) about what is ahead of us and mentioned the collapse of the dollar and buying gold and silver. He isn't convinced and asked a friend of his about it. Below is his friends response. After I read this I felt like my hair was on fire. Mark would like to hear my response and I want to be as clear and concise as possibe with factual back up so my response doesn't get tied up in ideologies(or as little as possible).

The main problems I see here are this:

That we have Capitalism not Corptocracy.

That the dollar and our economy are strong.

The fact that fiat collapse has never happened.

Any help you could provide would be greatly appreciated. Get ready for your blood to boil. 

With as much kindness as you can muster, tell your friend I vigorously disagree.  Tell him that those fears are groundless when examined with any degree of sincerity.
He should read this book: The next 100 years : a forecast for the 21st century   / Friedman, George.
He should read this book: The relentless revolution : a history of capitalism   / Appleby, Joyce Oldham.
If he reads these books, and has an iota of sense, his opinion will change, and I think will change for the better.
In the first he'll find an honest assesment of the immense strength and depth of the US Economy.  Our economic engine is literally unparalleled in the world.  For example did you know that the city of New York is a larger economy than the entire country of India.  There is more manufacturing in the US than there is in China.  The US Navy is larger than all other navies combined (and that doesnt include the Coast Guard).  These facts are indisputable yet probably surprising as they get zero play in current media.
In the second he'll find a history of capitalism and why it is so profoundly successful - and why other economic system and ideologies fail so disastrously.  In other words, no one invented or created capitalism.  It an outcome of man's innate selfish interest to take care of himself, his loved ones, his neighbors and his country.  It is not an artificial construct like socialism or communism (typified by inefficient central planning and profoundly unfair treatment of workers).  Feudalism (typified by poverty, routine famine, short life spans) reigned in Medieval Europe for more than a millenia, almost two.  Capitalism redically improved lifestyles (medical, transportation, food production) globally in a matter of 2 or 3 centuries. 
In short, I fear that your friend has read too much pop media and doomsayer journalists.  It happens.  If he can get through both books (and they are not bad reads at all), he'll understand my opinion that OPTIMISM IS THE ONLY REALISM.  Or he is beyond help.
Tell him to look at any chart that plots the returns of the DOW (^DJI) .  It's staggering to see how values have grown over time since then.  The day after my dad was born in 1945 the Dow closed at 176. The day I was born (1971) the Dow closed at 868.  That growth is a factor of 5 in 26 years.  Today the Dow closed at 10,999.  That is growth of more than a factor of 11 (EXCLUSIVE OF DIVIDENDS) in 38 years.  Another way: growth by a factor of 57 over 65 years.  If we extrapolate that forward (and I think it is perfectly reasonable we can), when I turn 76 I full expect the DOW to be over 100,000.  Think about that.
That is not to say there arent serious problems right now in the US and world economy.  My recollection is that these are not the failings of capitalism, but rather of fraud and cheating.  And cowards either too afraid or bought off unwilling to prevent these disasters.  Effective capitalistic systems discover, recover and then prevent such problems. 
Remember this: there has never been in the history of man and economic problem so complex or difficult that it could not be solved.  The situation your friend fears HAS NEVER HAPPENED IN THE HISTORY OF MANKIND.  In fact, the problems that have triggered past recessions usually just go away and even the best economists dont know for certain why. 
At the risk of writing literally a book, I'll break off here.  This conversation is best held over a pitcher of beer.  And reasonable minds will differ on certain aspects. But the profound fundamental truths cannot be disputed. 

Davos's picture
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Posts: 3620
Re: Help with a Response

Some friends may not be worth convincing. 

The fact of the matter is we do not have capitalism. How is it capitalistic to give a bank taxpayer money or tell the bondholders of GM to pound salt?

With 34++ million on food stamps and 22% unemployment it is anything but a strong economy.

Utah's economy is so strong they are cancelling 12th grade to save 64 million a year. I suppose when the economy really heats up their public school system will be K-4.

We are totally insolvent Bernake has to counterfeit our strong dollar because there aren't enough investors to buy bonds to cover the deficit.

Tell your friend he will wind up in the poorhouse listening to morons.

strabes's picture
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Joined: Feb 7 2009
Posts: 1032
Re: Help with a Response

point out the balance sheet of the US, every state, most businesses, most banks, and many people are insolvent, bankrupt.  where's the value creation?  if people can't see the obvious facts on debt and grasp the issue of debt, then there's nothing else to tell them.

I agree with Davos, I wouldn't waste much time.  his friend is a free market ideologue.  try this--it's written specifically for the ideologues to wake them out of their "free market capitalism" "value creation" trance:  if he doesn't then want to dig into it more and watch something like the Crash Course to understand the truth, then move on.

you'll be able to talk to him though once the Dow is back to 868...perhaps he'll be free from his ideology at that point since Dow growth is his ONLY attempt at factual (vs. empty theory and ideology) proof of value creation!!

Davos's picture
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Posts: 3620
Re: Help with a Response
strabes wrote:


you'll be able to talk to him though once the Dow is back to 868...

+1 Of course it will be in free-fall & what he will need will be buried below the stampeding crowd heading towards the only exit.

cpkj's picture
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Joined: Apr 14 2009
Posts: 26
Re: Help with a Response

There is one assumption inherent in that letter:  The future is the same as the past.

While I do not begrudge him his optimism, he needs to study the exponential function and how it applies to our world today.

His arguments are not arguments, they are merely recognition of facts and history.  They in no way address the logic of we "doom & gloomers."

So you cannot refute what he says.

If you wish to determine whether or not this person is worthy of your time, ask him to view the Crash Course and to rewrite his missive after he has done so.

If he won't watch it, do not worry about it.  You are arguing facts and he is arguing opinion.  Both are fun, but neither are compatible with the other.

The root of all our awareness is the exponential function and our own assumption that the likelihood of something occurring to flatten the curve is small to non-existent.  Arguing with one who will not acknowledge the math is a waste of your time.

Good Luck.

idoctor's picture
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Help with a Response

Johnny people hear what they want to hear. Let it go IMHO. I only talk about this stuff with people that have 1/2 of a brain or more & are open minded other wise nothing good will come of it. Make sure you don't let them know you have any inventory at your place just encase the SHTF LOL.

It is also wise that we keep an open mind to how high & far they can kick this can down the road to maximize our efforts also. I want to play all sides the best I can.

Good Yuke LOL.....

docmims's picture
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Joined: Jun 17 2009
Posts: 644
Re: Help with a Response

Ask him to name 2 DOW companies that were in the Origional DOW.  Answer GE is the only one still in existance.  The return on the DOW is from substituted companies.Wink Trick question!

V's picture
Status: Platinum Member (Offline)
Joined: Dec 14 2009
Posts: 849
Re: Help with a Response


As a member of the CM site and having posted 330 times, and I am sure you have watched the CC, I am perplexed as to why you would need to ask anyone here to help you refute any of this. I would also like to know what possible difference it makes if you somehow "win"  the argument?

As the great Sufi master Inayat Khan said " If someone wishes to remain asleep.......let them"

Or as my neighbor Tater Bug always says " Don't try to teach a pig to sing. It just aggravates the pig and it wastes your time"


ao's picture
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
Re: Help with a Response

Many responses here I agree with.  Some people just aren't worth the time and effort spent convincing them.  People hear what they want to hear.  If he's asleep and likes it, let him remain so.  There are so many holes in what he says, I'd call his argument the Swiss cheese argument.

Make it interesting though.  Make a friendly wager against him as to things will be in 5 years.  Have your monkey-in-the-middle friend hold the money (but make sure at least your portion is in gold). ;-)  

James Wandler's picture
James Wandler
Status: Martenson Brigade Member (Offline)
Joined: Aug 11 2008
Posts: 219
Re: Help with a Response


Just let the Crash Course do the talking for you.  Invite Mark to your place to watch it with you over a three week period - remain silent throughout and afterwards ask him what he thinks.  Be compassionate - this is an emotional belief system we are talking about.

Better than that would be to arrange for a group presentation in your community as in Sonora, CA.  People are best to wake up in groups and see that everyone else is going through emotional turmoil.  We owe Coop Kessel great credit for pioneering this for us all.

Be patient with the person who wrote the email.  I had the same belief until I watched the Crash Course and had an open mind and was willing to look through a different lense.  Others sadly may slip into denial.

Don't be too hasty to change everyone.  Of course you know something that they don't but you can't force change. 

At a minimum, plant a seed by making some prediction that is easy to keep (like for your friend to watch for another country in the news that is in turmoil) and then when this comes to pass perhaps your friend at work will come back to you with questions.

If you like you can direct your friend Mark to consider my post here and the related links in that post:

Set aside the questions about precious metals - it really is an advanced topic that requires a firm foundation to begin to consider.



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